Bill forces disclosure of law's effect on premiums

LANSING (AP) — State legislators are sharply divided over an emerging plan to require Michigan insurance companies to tell policyholders the impact of the federal health care law on their premiums.

Legislation pending in the Republican-led House would require that insurers give customers annual estimates of the overhaul’s effect on premiums — likely in renewal notices — including, but not limited to, taxes, assessments and other requirements of the law. The companies also would have to include a statement saying that the estimate is attributable to the Affordable Care Act and not the passage of any laws or regulations by the governor, state lawmakers or state regulators.

The bill’s sponsor, Republican Rep. Mike Shirkey of Clark Lake, says the estimate would not be unlike many other government-mandated disclaimers that businesses have to give customers. Constituents are calling his office in frustration to ask how to navigate the law, distrustful that insurers are using it as an excuse to hike premiums, he said.

“Let’s create a situation where there is no doubt that if your premium changed, up or down, was it associated with the Affordable Care Act?” said Shirkey, who argues that people deserve to know all its ramifications. “It casts such as big shadow and I don’t mean that in a pejorative way.”

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Unlike other Republicans, he is not a staunch opponent of all parts of the law. He was instrumental in helping guide Medicaid expansion, a key component of “Obamacare,” through the GOP-controlled Capitol.

Shirkey said one reason for pushing the bill is to insulate insurers from being improperly maligned for “delivering the bad news.”

Democrats, though, say the bill is nothing more than a political ploy.

“This bill is very disappointing to me. It looks politically motivated. It is politically motivated,” said Rep. Marcia Hovey-Wright, a Muskegon Democrat.

Democrats say if insurers are going to be required to tell people about the law’s cost, they should also explain its benefits.

Under the law, insurers must cover 10 essential benefits that will make plans more costly but also more comprehensive. Most plans also cannot deny coverage or charge more money because of pre-existing health conditions.

Democrats unsuccessfully tried to amend the legislation to include the positives before it won approval from a committee on Thursday.

“If we’re going to talk about transparency, we should be ... making sure that we give an accurate picture and not just one side because I know consumers would like the whole picture so that they can make an informed decision,” said Rep. Theresa Abed, a Grand Ledge Democrat.

The debate is coinciding with fallout over the faulty launch of a federal health care website in October — on which just 1,300 Michigan residents picked a plan — and estimated cancellation of 225,000 policies in Michigan that may fall short of minimum coverage standards under the law. State legislators and Gov. Rick Snyder have been just as divided over the law as Congress and President Barack Obama.

Though Medicaid coverage for more low-income residents ultimately was embraced by enough Republicans, they decided against the Republican governor’s call to run a state insurance website or at least partner with the federal government on one. As early as December, the Legislature could vote on an initiative petition to ban abortion coverage from public and private health plans, including those on the government-run exchange, unless a business or individual buys a separate policy. The proposed law would go to voters in November 2014 if lawmakers do not act.

As introduced, the legislation requiring the disclosure of the health law’s costs prompted concerns from insurers worried about the administrative burden and cost of calculating estimates and whether the estimates would give individuals and employers the best information.

“A substitute was adopted in committee that addressed a number of our concerns. We will continue to monitor the bill as it moves through the process,” said Mark Cook, Blue Cross Blue Shield of Michigan’s vice president of government affairs.

The bill would force insurers and health maintenance organizations to tell policyholders or subscribers, in written or electronic format, an estimate of the impact on premiums by March 1 and every year after through 2018.

Rep. Lisa Posthumus Lyons, an Alton Republican, acknowledges that the health overhaul is a “political hot potato” but denies political motivations are driving the Michigan legislation.
“It sheds light on the issue and it lets consumers exactly know what they’re paying for,” she said.
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House Bill 4816: http://1.usa.gov/1igHRqH
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